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Ireland’s high Solidarity Fund thresholds based on Government “Leprechaun economics" -Carthy

Sinn Féin MEP Matt Carthy has called for an urgent review of Ireland’s inordinately high Solidarity Fund Thresholds which he said are based on the Government’s “Leprechaun economics” GDP figures.

The European Union’s Solidarity Fund enables the EU to
provide financial support to Member States or regions in the event of a major
natural disaster.

Speaking on the fallout of Storm Ophelia during the European
Parliament’s plenary session in Strasbourg this week, Carthy outlined one of
the reasons why EU funds would not be available to Ireland.

He said:

“Last week Ireland was hit by the most extreme weather in 56
years in the form of Hurricane Ophelia. Homes, farms, businesses, roads,
schools and sports stadiums all fell victim to massive structural damage caused
by high winds, flying debris, flooding and falling trees. Unfortunately, three lives
were lost too.

“Government politicians have been quick to call for
applications to the European Solidarity Fund although they are aware that the
threshold has not been reached for the 3rd consecutive catastrophic
storm.

“The reason for this is that in 2015 the threshold for
Ireland to apply for Solidarity Funds was €803m. This year however, the
threshold is €1,223m – an increase of €402m!

“The story is the same for regional thresholds, which are
based on 1.5% of regional GDP. The
Border Midlands North West regional threshold has risen by €58m while the South
and East Region has risen by a whopping €338.4m. These figures, based on the
Government’s GDP figures, are making it impossible for regions to apply for
much needed recovery funding.

“The greatly inflated regional thresholds are a result of
distorted GDP figures famously described as “leprechaun economics”. The use of
GNI figures to calculate the national threshold of a completely unattainable
€1,223m also doesn’t take into account adjustments for retained earnings for
re-domiciled firms and depreciation on foreign-owned domestic capital assets.
The fact that Ireland again has not reached the threshold should serve as a
message for government to cut out the fantasy figures.

“In 2016 the value of the Irish economy was €275bn, but
according to GNI adjusted for retained earnings of re-domiciled firms and
depreciation on foreign-owned
domestic capital assets, the value was €190m. The massive difference indicates
that not only is the Irish economy not as strong as the official narrative
portrays, but also that the Irish Government may have facilitated US
multinationals in avoiding up to €85 billion in tax in one year alone.”

“On the EU side too there is a need to review the solidarity
fund as it discriminates against rural and peripheral regions. GDP, even when adjusted for purchasing power
parities across regions, is not the best way to measure the level of need in
regions when it comes to responding to natural disasters.

“With damage from Ophelia estimated as being between
€500m-€800m, the Government must begin looking for exceptional access to the
fund, as well as a change in the way these thresholds are defined going forward”.